Question

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

• Sales are budgeted at $210,000 for November, $190,000 for December, and $180,000 for January.
• Collections are expected to be 50% in the month of sale and 50% in the month following the sale.
• The cost of goods sold is 55% of sales.
• The company would like to maintain ending merchandise inventories equal to 45% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $22,700.
• Monthly depreciation is $13,700.
• Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	22,500
Accounts receivable		72,500
Merchandise inventory		51,975
Property, plant and equipment, net of $574,500 accumulated depreciation		1,096,500
Total assets	$	1,243,475
Liabilities and Stockholders' Equity
Accounts payable	$	256,500
Common stock		822,500
Retained earnings		164,475
Total liabilities and stockholders' equity	$	1,243,475

Expected cash collections in December are:

Multiple Choice

• $95,000

• $190,000

• $105,000

• $200,000

Answer 1

Collection in december Particulars Amount $ Collection out of december month sales (190000*50%) 95,000 Collection out of november month sales (210000*50%) 105,000 Total collection for the month of December 200,000 Answer is $ 200,000/.